Railways eyes Rs 94k cr coal connecting projects as part of Energy Corridor

National transporter targets FY24 to close critical project pipeline

The Ministry of Railways, as part of its ambitious energy corridor programme, is likely to sanction 107 coal-connectivity projects worth Rs 94,153 crore soon, multiple senior officials working on the plan told Business Standard.

The projects await the final nod of the Railway Board, and will kick-start the second phase of the Rs 2-trillion master plan.

These projects, primarily based in coal-rich states in East and South East India, will span a distance of 5,165 kilometres (km), focusing primarily on the establishment of new lines, gauge conversion for broader tracks, and network electrification for seamless movement of freight trains.

Business Standard had previously reported that the national transporter was preparing a master plan for coal logistics, after finding itself in an inter-departmental kerfuffle with the ministries of coal, power, and shipping over responsibility for poor coal planning that had led to a nationwide coal crisis earlier this year.

Priority corridor

The corridor is being planned and overseen by the newly formed GatiShakti division of the Ministry of Railways, which only looks at mega projects in need of speedy and coordinated execution, and is monitored at the highest levels of the government.

In the first set of projects that were rolled out, 68 critical ones worth Rs 1.08 trillion were taken up and are in various stages of execution.

Many of these 7,000-km projects, which feature in the ‘critical’ and ‘super-critical’ list of the Railways’ Mission 3000 as well, are aimed for completion by 2023-24 (FY24).

“As soon as the new projects get approved, we aim to close the critical project pipeline of the energy corridor by FY24; the rest may take more time,” one of the senior officials said.

He also confirmed that some of the new railway lines to be established are likely to be operated as micro dedicated freight corridors (DFCs) — a development that Rail Minister Ashwini Vaishnaw had hinted at during an address last month.

Another official said that a medium-term plan being considered is to connect these smaller energy corridors with the Eastern DFC, which runs from Punjab to West Bengal, to end coal transportation woes and ensure timely supply of thermal coal to power houses during peak demand.

The national transporter has often been blamed for not providing enough trains to meet coal demand. 

Moreover, the plan also includes new railway lines from ports to coal mines and between different ports as well. This will be done to encourage coastal shipping of coal wherever feasible, a plan that the government’s policy think tank NITI Aayog is also monitoring.

Revenue boost

These projects will also help the Railways achieve its aim of boosting its freight revenue and meet its targets under the National Rail Plan. The ministry wants to double its freight loading to 3,000 million tonnes by 2027, and increasing coal freight and capturing the finished goods market are key variables in that pursuit.

However, the global push around the 27th Conference of the Parties (COP27) to decrease reliance on fossil fuels for energy was a concern for the national transporter, which earned almost half of its Rs 1.43-trillion freight income in 2022-23 through coal.

A third official said that there were internal worries over the projected pace of growth in coal freight revenues of the national transporter, given the mounting international pressure.

Decreasing share of coal in energy would mean lower transport revenue, risking the profitability of the new coal corridors of the Railways.

India’s stance on its energy mix at COP27 has given wiggle room to the Railways’ plans to connect more coal belts with the rail network, the official said, adding that the ministry sees these projects generating thousands of crores in revenue in the coming years.

“Developing countries need independence in their choice of the energy mix, and in achieving the sustainable development goals,” Minister for Environment, Forest & Climate Change Bhupender Yadav had said at the COP27 plenary session in Egypt’s Sharm el-Sheikh.

On track

• Coal mine-to-port projects, mine-to-mine projects, and port-to-port projects on track to push coastal shipping of thermal coal
• Some of the new lines for coal connectivity may be used as dedicated corridors